Exhibit
10.3

    


    AMERICAN
DG ENERGY INC.

    


    Nominating
and Governance Committee Charter

    


    The Nominating and Governance Committee
(the “Committee”) of the Board of Directors (the “Board”) of American DG Energy
Inc. (the “Company”) shall consist of a minimum of three (3)
directors.  In the event one or more vacancies on the Committee
temporarily reduce the number of members to two (2), actions taken by the two
members of the Committee will be deemed authorized actions of the
Committee.  Members of the Committee shall be appointed by the Board
and shall serve until the meeting of the Board occurring immediately after the
next following annual meeting of the stockholders, and until their successor are
duly elected and qualified, unless they are earlier removed by the Board acting
in its discretion.

    


    Purpose

     

    The purpose of the Committee shall
be:

     

    
      	
               
      

            	
              (1)

            	
              to
      assist the Board by recommending the composition of the Board and in
      identifying individuals qualified to become Board members, consistent with
      criteria approved by the Board;

            


    

     

    (2)         to
advise the Board with respect to functions and structures of
committees;

     

    
      	
               
      

            	
              (3)

            	
              to
      develop, recommend to the Board and implement corporate governance
      principles applicable to the
Company;

            


    

     

    
      	
               
      

            	
              (4)

            	
              to
      assist the Board in providing for planned succession of senior management
      positions;

            


    

     

    
      	
               
      

            	
              (5)

            	
              to
      develop and monitor a process to assess the effectiveness of the Board and
      to lead the Board in its annual review of the Board’s performance;
      and

            


    

     

    
      	
               
      

            	
              (6)

            	
              to
      develop and propose for consideration by the Board compensation policies
      for the Company’s non-employee directors that enable the Company to retain
      highly qualified individuals for such
positions.

            


    

     

    In
furtherance of this purpose, the Committee shall have the following authority
and responsibilities:

     

    
      	
               
      

            	
              1.

            	
              To
      lead the search for individuals qualified to become members of the Board,
      consistent with criteria approved by the Board and to recommend to the
      Board nominees to be presented for election as directors by shareholders
      at each annual meeting of shareholders.  The Committee shall
      select individuals as director nominees who have the highest personal and
      professional integrity, who shall have demonstrated exceptional ability
      and judgment and who shall be most effective, in conjunction with the
      other nominees to and members of the Board, in collectively serving the
      long-term interests of the
shareholders.

            


    

     

    
      	
               
      

            	
              2.

            	
              To
      review the Board’s committee structure and to recommend to the Board for
      its approval directors to serve as members of each
      committee.  The Committee shall review and recommend committee
      slates annually and shall recommend additional committee members to fill
      vacancies as needed.

            


    

     

    
      	
               
      

            	
              3.

            	
              To
      develop and recommend to the Board for its approval corporate governance
      guidelines.  The Committee shall review the guidelines on an
      annual basis, or more frequently if appropriate, and recommend changes as
      necessary.

            


    

     

    
      	
               
      

            	
              4.

            	
              To
      oversee the development and implementation of senior executive succession
      plans.

            


    

     

    
      	
               
      

            	
              5.

            	
              To
      develop and recommend to the Board for its approval an annual
      self-evaluation of the Board and its committees.  The Committee
      shall oversee the annual self-evaluation.  In addition, the
      Committee shall consider and evaluate other methods of assessing the
      effectiveness of the Board.

            


    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              6.

            	
              To
      review annually the Company’s compensation package for non-employee
      directors to ensure that compensation to such persons is competitive and
      appropriate, and to recommend changes, when appropriate, to the Board for
      approval.

            


    

    


    Subcommittees

     

    The Committee shall have the authority
to delegate any of its responsibilities to subcommittees as the Committee may
deem appropriate in its sole discretion.

     

    Committee Membership
Qualifications

     

    All of the members of the Committee
shall meet the independence requirements of the corporate governance rules of
such national securities exchange on which the shares of Common Stock of the
Company are listed.

     

    Miscellaneous

     

    The Committee shall have the authority
to retain (or terminate) any search firm engaged to assist in identifying
director candidates, and to retain outside counsel and any other advisors as the
Committee may deem appropriate in its sole discretion.  The Committee
shall have sole authority to approve related fees and retention
terms.

    


    The
Committee shall report its actions and recommendations to the Board after each
Committee meeting and shall conduct and present to the Board an annual
performance evaluation of the Committee.  The Committee shall review
at least annually the adequacy of this charter and recommend any proposed
changes to the Board for approval.

     

    Adopted:       August
31, 2009